TeamHealth net revenue up 35% in Q1 2016
Team Health Holdings, Inc. ("TeamHealth" or the "Company") has announced results for its first quarter of 2016.
Net revenue increased 35.1% to $1.14 billion from $840.5m in the first quarter of 2015. It says IPC contributed 22.9%, same contract revenue contributed 5.9%, legacy (non-IPC) acquisitions contributed 5.2%, and net new growth contributed 1.1% of the increase in quarter-over-quarter growth in net revenue. Within the legacy acquisitions category, new hospital contracting opportunities that were initially developed by our sales and marketing process contributed 1.6% of overall net revenue growth between quarters.
Same contract revenue increased $50.0m, or 6.6%, to $804.3m from $754.3m in the first quarter of 2015. A 4.0% increase in same contract volumes contributed 3.1% to same contract growth while an increase in estimated collections on fee for service visits provided a 2.8% increase in same contract revenue growth between quarters. An extra day in the first quarter of 2016 contributed approximately 1.0% of volume growth. Contract and other revenue contributed 0.7% to same contract revenue growth between quarters. IPC reported revenue of $192.7m in the first quarter of 2016 while legacy acquisitions contributed $43.4m of revenue growth and net new contract revenue increased by $9.0m between quarters.
TeamHealth president and chief executive officer, Mike Snow, commented, "We are pleased with our financial results in the first quarter with double digit growth in both net revenue and Adjusted EBITDA and a significant improvement in operating cash flow. We benefited from solid performance in our core operations in addition to benefiting from the growth associated with the IPC transaction.
"First quarter consolidated revenue growth was driven by positive contributions from IPC, same contract performance, acquisitions from the core TeamHealth business, and net new contract sales. IPC provided the largest contribution to revenue growth during the quarter and its operational integration is progressing well. We continue to focus on integrating the business to provide for future growth and realizing the synergies as initially targeted. Same contract was the second largest contributor to revenue during the quarter as we experienced an increase in patient volumes late in the quarter from the emergence of a delayed flu season and also benefited from an increase in estimated collections per visit. In addition, the Company continued to benefit from legacy acquisitions, driven by both traditional acquisitions and hybrid acquisition opportunities while net new contracts provided a modest contribution to revenue growth during the quarter.
"As previously announced, we were pleased to reach an agreement with JANA Partners whereby we added two new Board members in the quarter and will add a third new Board member in January 2017. We believe this outcome best serves the interests of TeamHealth and all of its shareholders and we are confident that Mr. Crawford, Mr. Ostfeld and Ms. Schlichting, with their diversified expertise and relevant experience, will add valuable perspective to TeamHealth's Board. We remain committed to delivering the highest quality patient care, supporting our affiliated clinicians and hospital partners, achieving our operational and financial goals for 2016, and maximizing value for our shareholders.”